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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3653
Experience:  Solicitors 2 years plus PQE
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Hello We are a small UK company that has not traded yet. We

Resolved Question:

Hello
We are a small UK company that has not traded yet. We have ordinary voting shares (I have 100%) and we have ordinary non-voting shares, the same in everyway except they do not vote. I want to split my holding of voting shares and convert half to non voting shares. I will sell the other half to a new holding company for £1 (the company has not traded yet). Could you tell me what are the steps I need to follow? I am the only director.
Submitted: 3 years ago.
Category: Law
Expert:  Alex J. replied 3 years ago.
Hi,

Thank you for your question and welcome.

My name is XXXXX XXXXX I am a company law expert.

Do the articles of association of the company allow you to have two classes of shares?

Does the company have any assets?

Kind regards

AJ
Customer: replied 3 years ago.

Yes, the articles allow more than one class of shares. The company has negative net assets.

Expert:  Alex J. replied 3 years ago.
Hi,

Thank you.

The law for reclassifying shares is contained in S.630 of the Companies Act 2006.

You will need to do the following:
1. Obtain the written consent of shareholders representing at least 75% of the share capital or obtain a special resolution at a general meeting; only once you have obtained this consent then:-
2. File a form SH10 at Companies House updating the class rights and showing the shares to be non voting shares;
3. File a form SH08 at Companies House to show that the shares concerned have been converted and renamed into the non-voting class of share;
4. File the resolution referred to in point 1 at Companies House;
5. Update the register of shares.

Once you have done that you can then transfer the shares to the new company. Presumably you can do this at par value if the assets of the company are negative but I would check this with an accountant first.

You will need to check the articles to confirm there are no restrictions on the transfer of shares and to check you follow the correct procedure for passing a special resolution.

Can I assist any further?

Kind regards

AJ


Customer: replied 3 years ago.

That's very helpful, and I have everything now, thank you.

Expert:  Alex J. replied 3 years ago.
No problem.

I wish you the best of luck.

Kind regards

AJ
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